HC Deb 07 July 1938 vol 338 cc560-3

Decision by the Umpire.

Association—Amalgamated Engineering Union. Name

On the facts before me my decision is that if the above named employed person had made a claim for unemployment benefit the claim would have been allowed.

The claimant was employed up to and including 7th May, 1938. From 9th May to 16th June of that year he was wholly unemployed. On the last named date he received a payment of £1 10s. 3d. The payment was made in accordance with the terms of the agreement dated 12th August, 1937; the material terms of which are set out in Decision 2354/38, which will be reported in due course so there is no necessity to repeat them in this decision.

That decision establishes that the payment made to the claimant on 16th June, 1938, was a payment of wages.

The principles applicable to payments of wages made to insured contributors during a period when they are not actually working have been long established.

It is correct to say, as was said when this and other appeals were heard, that when those principles were enunciated holidays with pay were not so universal as they are to-day This is not a ground for holding that those principles are no longer applicable and for substituting fresh ones.

Where a principle has been established by an interpretation placed by a decision of the Umpire upon the words of the Statute, and subsequent Acts of Parliament dealing with Unemployment Insurance have been passed without any provision therein for rendering such a decision not applicable, it has always been assumed that Parliament has recognised that the Umpire has placed an interpretation upon its words which it intended should be placed upon them.

The principles applicable to cases in which payment of wages is made in respect of a period when no actual work is being performed differ according as to whether the insured contributor's employment has or has not terminated before the payments are made.

When his employment has not terminated, and "in accordance with the terms of his employment an employé is entitled to receive, and does receive, from his employer part wages during periods when his actual services are not required, he continues during such periods to be in employment and is not unemployed. The fact that the payments are made pursuant to the customary or expressly agreed terms of the employment indicates that the relation of employer and employé continues so long as the payments are made'' (Decision 6084; reported out of its numerical order on page 3 of Pamphlet 36 of U.I. 440). As my predecessor stated in the decision he was not enunciating any new principle but was following decisions given by his predecessor under the National Insurance Act, 1911, and Out of Work Donation Regulations.

When the employment of an insured contributor has terminated and he continues thereafter to receive wages, Section 35 (6) of the Unemployment Insurance Act, 1935 (previously Section 4 (1) of the Unemployment Insurance (No. 2) Act, 1924), is applicable.

Section 35 (6) of the 1935 Act (so far as it applies to this case) reads: "Notwithstanding that the employment of an insured contributor has terminated, he shall not be deemed to he unemployed for the purposes of this Act during a period in respect of which he continues to receive wages."

In order to determine whether employment has terminated another well-established principle is applicable, namely, the principle which is known as the "Twelve Days' Rule" (see Decision 7712).

Applying the Twelve Days' Rule to the present case, the employment of the claimant had terminated on 7th May, 1938, so Section 35 (6) of the 1935 Act must be applied to this case.

Can it be said the claimant "continues to receive wages" notwithstanding that his employment has terminated when the employment terminated on 7th May, 1938, and there was no receipt of wages until r6th June, 1938? To answer that question in the affirmative would be to hold contrary to Decisions 2461/ 25, 7799/29, 6465/31, 6710/32 and many other decisions to a like effect.

The present case is indistinguishable from Case 6710/32, and as the Court of Referees' decision accords with the decision in that case it cannot be disturbed.

Wages are not paid daily, therefore an interval of a few days between the termination of the employment and the receipt of wages does not prevent the application of Section 35 (6) of the 1935 Act (see Decision 4886/ 28). What length of time intervening between the termination of the employment and the receipt of wages entitles a finding that there is a continuation of the receipt of wages depends upon the facts of each case. Where wages are paid weekly or fortnightly an interval of a week or a fortnight respectively might be held not to break the continuity of the receipt of wages. In the present case the claimant's wages were, presumably, paid weekly, and the receipt of wages five weeks after the termination of his employment cannot be held to be a continuation of the receipt of wages.



Date: 5th July, 1938.

Decision No. 2569/38.

10 and 11. Miss Ward

asked the Minister of Labour (1) how many men on Tyneside have had their benefit reduced owing to receiving holiday credits;

(2) how many men on Tyneside are worse off in race week as a result of having drawn holiday credits?

Mr. Brown

In general, men on Tyneside have not had the sums otherwise due to them as unemployment benefit reduced owing to the receipt of holiday credits, and are better oft on account of such credits. The number of cases in which this is not so must be small and could only be ascertained by a detailed examination of many thousands of individual records. I should point out that men who had been finally discharged for more than a week receive the full amount of benefit in addition to their holiday credit.

Mr. Montague

Why should anyone not have the advantage of holidays with pay?

Mr. Brown

That is precisely the question to which the legal argument has been addressed. The House must understand that in this new and very desirable movement which has so swiftly come about for holidays with pay there are very many tricky points that crop up in insurance law which would not have arisen but for this movement.

Mr. R. J. Taylor

Could not the right hon. Gentleman's Department have come to a conclusion on this matter in the same time as, or in less time than, it took them to draw up the circular preventing people from getting it?

17. Mr. Kennedy

asked the Minister of Labour whether he has considered the resolution of the Glasgow and Edinburgh Trades Councils regarding the holiday pay restrictions imposed on the unemployed during the holiday period, and whether the restrictions will be suspended or removed?

20. Mr. J. J. Davidson

asked the Minister of Labour whether he has considered the resolution sent to him by the Glasgow and Edinburgh Joint Trades Councils Committee, representing all Scottish trades councils, protesting against the holiday pay restrictions imposed upon the unemployed on standard benefit, and on the Unemployment Assistance Board during the holiday period; and whether he has any statement to make?

Mr. Brown

I would refer the hon. Members to the replies which I have just given to questions by the hon. Member for Stoke (Mr. E. Smith) and others on the subject of the payment of unemployment benefit to men who receive holiday payments. As the House is aware, the general question of the treatment of holidays under the Unemployment Insurance Scheme is at present under examination by the Unemployment Insurance Statutory Committee.

Mr. Davidson

Will the Minister consider sending to this important industrial organisation a copy of the findings of that inquiry as soon as they are available?

Mr. Brown

I will consider that.